Year-End Checklist: Moves to Make Before December 31
December 24, 2025
As the year draws to a close, it’s easy to focus on holiday plans and put financial tasks on hold. However, December 31 is more than just a symbolic turning point—it is a firm cutoff for many tax and planning opportunities. Decisions made (or missed) before year-end can influence your tax bill, long-term savings, and financial flexibility well into 2026.
Below is a practical, year-end checklist of ten actions worth reviewing before the calendar turns.
1. Maximize Retirement Plan Contributions
Contributions to employer-sponsored retirement plans such as 401(k)s and 403(b)s must be completed by December 31. For 2025, the contribution limit is $23,500. Individuals age 50 and older may contribute an additional $7,500, and some plans allow even higher catch-up contributions for those ages 60 through 63.
While IRA and HSA contributions can generally be made up until the tax filing deadline, contributing before year-end may provide earlier tax benefits. If you receive a year-end bonus, consider directing a portion into your retirement plan.
For HSAs, timing matters. Contributions made through payroll withholding avoid Social Security and Medicare taxes, while direct contributions do not. To capture this benefit for 2025, payroll elections typically must be in place before your final paycheck of the year.
2. Take Required Minimum Distributions
If you are age 73 or older, required minimum distributions (RMDs) from traditional IRAs and most employer retirement plans must be taken by December 31. Failure to do so can result in significant penalties.
Charitably inclined individuals may consider directing part or all of an RMD to a qualified charity through a qualified charitable distribution (QCD). This approach can satisfy the RMD requirement without increasing taxable income.
Inherited IRA rules are more complex, particularly for non-spouse beneficiaries. Depending on when the original owner passed away, annual withdrawals may be required in addition to the 10-year distribution rule.
3. Evaluate Roth Conversion Opportunities
Converting assets from a traditional IRA to a Roth IRA must be completed by December 31 to be included in the current tax year. While the converted amount is taxable today, future qualified withdrawals from a Roth are generally tax-free, and Roth IRAs are not subject to RMDs.
Periods of market volatility may create opportunities to convert assets at lower values, potentially reducing the tax cost of the conversion. Roth conversions can also help diversify future tax exposure in retirement.
4. Review Tax-Loss Harvesting Opportunities
Realizing investment losses before year-end can help offset capital gains and, in some cases, reduce ordinary income. Losses that exceed current-year limits can be carried forward to future years.
Be mindful of wash sale rules, which disallow losses if a substantially identical investment is purchased within 30 days before or after the sale.
5. Make Charitable Gifts Strategically
Charitable contributions must be completed by December 31 to be deductible for the current year. Beyond writing a check, there are planning strategies that may increase the tax benefit of giving.
Donating appreciated securities held for more than one year may allow you to avoid capital gains taxes while still receiving a charitable deduction. Some individuals also choose to group multiple years of giving into a single year to exceed the standard deduction threshold and itemize.
6. Spend Remaining FSA Balances
Flexible spending account (FSA) funds often expire at year-end. While some plans allow a grace period or limited rollover, unused funds may be forfeited. Review your plan’s rules and submit eligible expenses before the deadline.
7. Fund Education Savings Accounts
Contributions to 529 plans made by December 31 may qualify for state tax incentives, depending on where you live. Families may also consider prepaying tuition for early 2026 to maximize education-related tax credits.
For larger gifts, 529 plans allow individuals to front-load up to five years’ worth of annual gift exclusions without triggering gift tax, provided proper reporting is completed.
8. Take Advantage of Annual Gifting Limits
You may gift up to $19,000 per recipient in 2025 without using your lifetime estate and gift tax exemption. Married couples can double this amount by splitting gifts.
Strategic gifting can reduce the size of a taxable estate while allowing you to support children, grandchildren, or other family members during your lifetime.
9. Accelerate Eligible Deductions
If you expect to itemize deductions, paying certain expenses before year-end may be beneficial. Medical expenses that exceed 7.5% of adjusted gross income may be deductible, so advancing procedures or prescriptions could help meet the threshold.
Similarly, making mortgage or property tax payments earlier than scheduled may increase deductible amounts, provided the payment is credited before year-end.
10. Delay Income When Appropriate
Self-employed individuals or those with variable income may be able to postpone billing or income recognition until January. Deferring income could help manage tax brackets or reduce exposure to certain surtaxes, though this approach should be evaluated carefully.
Final Thoughts
Year-end planning is about more than meeting deadlines—it’s about positioning yourself for the year ahead. While not every strategy will apply to every situation, reviewing these items before December 31 can help identify meaningful opportunities and avoid costly oversights.
Because tax rules are complex and frequently change, working with a financial or tax professional can help ensure these decisions align with your broader financial plan.
Sources:
https://www.fidelity.com/learning-center/personal-finance/year-end-money-checklist
Disclosure:
This information is an overview and should not be considered as specific guidance or recommendations for any individual or business.
This material is provided as a courtesy and for educational purposes only.
These are the views of the author, not the named Representative or Advisory Services Network, LLC, and should not be construed as investment advice. Neither the named Representative nor Advisory Services Network, LLC gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your Financial Advisor for further information.